contemplating the intersection of work, the global economy, and Christian mission

Mar 03, 2009

The Best Book on the Market - Book Review

I’m convinced that one of the most misunderstood concepts in the modern world is markets. Too often portrayed by advocates as the handmaiden of God that will usher in his Kingdom, and reviled by detractors as the handmaiden of the Anti-Christ perverting people into avarice driven malevolence, its true benefits and limitations are rarely appreciated. Markets are far from having messianic qualities, but markets have played a central role in the expansion of material well-being, first in the west, and then to an increasing degree around the world in recent years.

If you want to get a handle on how markets work, then I suppose you could take a class in introductory economics, or maybe read an economics textbook. A more direct and less time consuming approach might be to read Eamonn Butler’s recent short book, The Best Book on the Market: How to Stop Worrying and Love the Free Economy. It is a wonderful 150 primer on what markets are and how they work, written in words and using examples that any layman can understand.

So many debates about economics in religious venues are almost exclusively focused on matters of distribution. It is all but taken for granted that wealth and goods simply exist; our mission is to distribute them equitably. Certainly distribution is an important question, but this leaves out one of the foundational economic questions each society must ask: How many of which things shall we produce today? The answer to that question is changing by the nano-second. To have a large complex economy function, there must be a dynamic feedback loop. There must be real-time changes to incentives to discourage the supply of some goods versus others.

The myopic distributionist view tends to see the world in terms of a snapshot. “Too much wealth here and not enough there? Simple. We’l l just rearrange the elements in the snapshot.” While a snapshot tells us important information about the world, the economy is not static. It is a motion picture. Without viewing the snapshot in terms of the frames that lead up to its existence and how rearranging elements will impact the frames that follow, a deeply distorted view of the world emerges. Policy made on the basis of the snapshot alone can be highly destructive yet this is precisely how some activists work.

Markets are far from perfect but neither are they based on greed. They’re based on win-win transactions where each party gives up something they value less then what they trade for. They orient us toward looking for how we can serve others. They tie our common welfare together.

Butler brings the dynamism of the market to life in his book in short order. I’m guessing many readers could read the book in an afternoon. it is a great little book and I highly recommend it.